March 09, 2015

Format Winners of 2014

Which radio formats were the big winners in 2014? You may be surprised.

While Nielsen relies on their PPM national database to identify winners and losers, Harker Research believes there’s a better way to determines format success.

Nielsen numbers are unduly influenced by a few large markets. We believe a better way is to track the performance of all stations in a format, determining the percentage of stations that are gaining share.

The winners are the formats where a majority of stations are growing. The losers are the formats where a majority of stations are losing share.

To determine the winning formats of 2014 we compared October through December 2014 to the same months in 2013. We excluded the Christmas book because of the distortions it causes.

We used the same format designations that Nielsen uses, and excluded formats with too few stations to reliably make a determination.

We then ranked formats by the percentage of stations that gained share, with the top format having the highest percentage of stations ahead of where they were this same time in 2013.

So what formats were the big winners in 2014?

The winningest format for 2014 was Christian.

More than two thirds (69%) of Christian AC and CHR stations ended 2014 ahead of where they ended 2013.

Think of the winning percentage as your odds of being ahead for the year. If you are a Christian station, your odds of being ahead at the end of the year were two to one.

If your station is among the one-third that lost share last year, it signals a need to take a hard look at the station. Is there a difference between your approach and that of the winners? Are there special circumstances that temporarily hurt the station’s performance?

The second most successful format in 2014 was Adult Hits. Slightly less that two-thirds (63%) of Adult Hit stations ended 2014 ahead of their 2013 numbers.

Classic Hits also had a good year, ranked third. Sixty percent of Classic Hit stations ended the year up over the previous year.

News followed close behind ranking fourth at 59%, still in positive territory. Sports followed at a plus 56%.

Urban Contemporary was also in positive territory at 56%, tied with Sports.

Adult Contemporary and Soft AC (Nielsen combines the two formats) comes in seventh at 53%, just barely over 50:50 in positive territory.

Country may surprise you. Nielsen’s analysis claims that Country is on the ropes, but a better way to think of the format is “moving sideways.” Country comes in eighth at 52%, tied with News-Talk.

Two Rock formats, Alternative and Classic Rock ended the year essentially tied.

Alternative edged out Classic Rock by a single percentage point in gainers (51% to 50%), but when we take into account stations that were flat for the year, Alternative did a little better than Classic Rock, 54% to 50%. Active Rock was down, but few stations identify themselves as Active on their Nielsen forms.

Urban AC tied Classic Rock at dead even. As many Urban AC stations lost share as gained share in 2014.

Crossing the 50% mark we move into negative territory. It means that for formats below this level, more stations lost share as gained share in 2014.

So these are the 2014's losers:

The big loser in 2014 was Contemporary Hit Radio.

Only a third (37%) of Rhythmic CHR stations found themselves ahead at the end of 2014. A relatively small number of CHR stations call themselves Rhythmic, so the losses might not seem significant. However, mainstream CHR was not far behind.

Spanish is next, essentially even for the year. Forty-nine percent of Spanish stations were up, 49% were down, and 1% were flat.

You will find differences between Nielsen’s analyses and ours. That’s because of the way Nielsen calculates the company’s “national” numbers.

The company’s national database includes tens of thousands of panelists, but most of those panelists live in New York, Los Angles, Chicago, San Francisco, Dallas, and the rest of the top ten markets.

The Nielsen “National Regional” database creates national estimates by summing up all the quarter-hours in all Nielsen markets, then calculating a share for each format. This dates back to the way Arbitron calculated shares for the yearly Radio Today releases.

The problem is that when we add up quarter-hours across markets, most of the quarter-hours come from the largest markets like New York, Los Angeles, and Chicago.

A quarter of the 45 PPM market quarter-hours come from just these three markets. Half of all PPM quarter-hours come from the top 10 PPM markets.

What happens to a single station in a top five market can cancel out what’s happening to a half dozen stations in smaller markets.

Here’s the problem:

Let’s say a new format signs on in Austin, New York, Pittsburgh, Raleigh, and Sacramento. The format takes off in all but New York. It’s a huge hit everywhere else, but bombs in New York.

So is the format a winner or loser?

We call it a winner. Four out of five stations in the format are doing well. That means 80% of the stations have bested their previous numbers.

According to Nielsen’s way of looking at it, it could appear to be a failure. New York has something like 4,000 meter panelists, while the other four markets have that number of panelists combined.

If the station in New York tanks and its shares collapse, it could cancel out all the gains in Austin, Pittsburgh, Raleigh, and Sacramento.

And consider the opposite. Let’s say the New York station is a huge success but the stations in the other markets aren’t.

Nielsen could conclude that the format is a winner when four out of five stations are failing.

It’s a hypothetical example, but it illustrates how large markets have a huge impact on Nielsen’s “national” trends.

If we want to talk about US radio listening as a whole, the Nielsen approach is great. Most people live in large markets, so what’s going on in larger markets should matter more.

However, if we want to know how formats are doing, discounting what’s going on in the majority of markets is the wrong approach.

Every station in a format matters just as much as every other when it comes to assessing the health of formats.

Harker Research regularly reports format winners and losers here at Radio Insights. We believe our approach is a better tool to see what’s going on with formats. Check back regularly.

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